Price of Gold Fundamental Daily Forecast – Drop in Yields Will Be Catalyst That Spikes Gold Prices Higher

Gold is trading higher on Friday, getting most of its support from a dip in Treasury yields while a stronger U.S. Dollar is likely capping gains. Gold has actually been performing well this week despite yesterday’s reversal to the downside.

The price action suggests the market may have finally reached a value area. This may be underpinning prices. We’ve also seen evidence over the last two weeks that buyers are willing to come in on the dips.

However, we haven’t seen the surge in buying volume needed to trigger an upside breakout. We haven’t seen a catalyst strong enough to encourage traders to buy strength instead of the small dips.

At 12:49 GMT, April Comex gold is trading $1738.00, up $5.50 or +0.32%.

The current price action also suggests that professionals may be accumulating gold at current price levels. If there is a bullish catalyst then look for gold to begin its breakout over $1744.30. The move could attract the public if it begins to show up on their trading radar. If they’re willing to buy strength then look for a surge into at least $1787.30.

The big “if” is the bullish catalyst. Based on the recent price action, it’s likely to be Treasury yields. If yields begin to fall over the short-run then look for gold prices to spike higher.

We’ve seen over the past two weeks that gold traders haven’t been too fearful of rising yields. In fact, it looks as if the gold market has diverged from yields, i.e. gold edged higher while bond yields hit their highest level since January 2020.

This is a good sign for gold bulls because it could mean that even a short-term break in yields could spike gold prices higher.

Daily Forecast

I’m leaning to the upside today as long as yields remain stable. I think a sharp break in yields will be the catalyst to drive gold prices sharply higher. A support base seems to have been formed. Now all we need is a catalyst that will encourage buyers to chase the market higher.

For a look at all of today’s economic events, check out our economic calendar.